Want to be a food delivery driver? Check insurance first

Tyler Wade
by Tyler Wade June 5, 2020 / No Comments

Are you temporarily laid off and looking for a new source of income? With the surge in demand for services like UberEats, SkipTheDishes, and DoorDash, going to where people want to spend their money, is a smart financial decision.

We already gave you a primer on Uber car insurance, but fast food delivery insurance is slightly different. Uber driver or not, it’s normal to drive people around. Delivering pizza, sushi, or eggplant kangpungi from the hottest Korean restaurant is a commercial activity, where only a few providers offer coverage. 

The risks of driving for UberEats without insurance

In April 2019, a Skip the Dishes courier was out $8,400 after a collision. It was due to a denial of her claim and cancellation of her policy, according to CTVnews. Here’s why insurance didn’t pay: She didn’t inform her insurance company she was a delivery driver until she made a claim. You need to communicate any change in usage, so the insurance company can re-evaluate the risk and charge accordingly. Failure to do so, as you can see, is an expensive endeavour. 

Unlike Skip the Dishes, there is car insurance for UberEats drivers. Still, with any insurance, it’s critical to understand your coverage and its gaps.

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UberEats car insurance

UberEats commercial insurance policy, by Intact insurance, gives you $2 million in third-party liability coverage, which pays for damage to other people’s property and injuries. They give you uninsured motorist protection, another standard in Ontario car insurance.  It pays for repairs if you’re not at fault in a collision, and the other driver has no insurance coverage. A few common add-ons to any personal car insurance policy are collision and comprehensive, which pay for repairs to your car after an at-fault accident or damage to your vehicle while it’s parked (e.g. falling trees, vandalism),

Sounds ok, but mind the gaps.

For one, that coverage is only when a delivery driver from when you pick up an order to when you deliver the food. In between, there is coverage, but that $2 million becomes $1 million in third-party liability. 

The collision and comprehensive coverage are only available if you also have these coverages on your personal policy.

Also, in a worst-case scenario, if you’re in an UberEats car accident and you go over these limits, you’ll want your own policy to cover the difference. Again, if you fail to inform your insurance provider, they’re under no obligation to compensate you for the repairs and associated costs.

Here’s a link to Uber’s Ontario policy.

UberEats driver requirements

  • Be at least 21-years-old
  • Own a valid provincial driver’s license
  • Use an eligible vehicle (can’t be more than 7-10 years old, depending on location)
  • Pass a vehicle inspection
  • Proof of insurance

DoorDash car insurance

DoorDash’s insurance is a downgrade from the UberEats policy. To begin, as an independent contractor for DoorDash, “you are required to maintain your own insurance.” It also states, “damages sustained to your vehicle in an auto accident are your responsibility.” DoorDash wants you to deal with your own auto insurance directly.

DoorDash does provide “excess auto insurance,” which is only third party liability (i.e. property damage or bodily injury) over and above your own coverage. You can only access this coverage “after exhaustion of your personal auto insurance limits.” In other words, in the rare instance that you cause more than the minimum $200,000 third-party liability, you otherwise won’t be using their insurance.

DoorDash driver requirements

  • At least 18 years old
  • Valid driver’s license
  • Insurance
  • Clean driving record
  • There are no vehicle restrictions

Skip the Dishes car insurance

There is no mention of car insurance on their website. The requirements are a “reliable” vehicle, a valid driver’s license, and car insurance; they’ll perform a background check after you fill in the application. Of course, for it to work, you need a smartphone. For Skip, you need to make sure you have your own insurance to cover commercial activity.

Food delivery courier insurance options

  • Intact insurance – At no additional cost to you, Intact can give you coverage for UberEats on your personal policy.
  • belairdirect  –  “Our personal lines product, designed exclusively for peer-to-peer delivery, is tailor-made to fit Uber Eats’ commercial insurance policy.”
  • Wawanesa – During COVID, Wawanesa mentioned they may allow commercial activities to make ends meet, but to call them first.
  • Desjardins – You can’t find it on their site. Still, after some sleuthing, Desjardins offers “Artisan vehicle” insurance for light commercial use. 
  • A commercial policy – Commercial auto insurance doesn’t have to be expensive. In fact, according to one broker, it can sometimes be cheaper than a personal plan, especially if you’re an experienced driver. But, know that most commercial policies won’t cover a 4 door sedan, so you’ll need at least an SUV to make it work. 
  • Public car insurance – Delivery insurance in BC, Saskatchewan, and Manitoba are all provided by the public auto insurer. Speak with them if you live in those provinces about what options are available.
  • Speak with your insurer – Be clear and upfront with your intentions. While they may not advertise a special endorsement, you may still be able to modify your policy for a little commercial use. If not, shop for car insurance quotes from a provider who will.

How much is food delivery insurance?

It depends on your age, experience, car, and history, only to name a few. But, Intact, Belair, and Desjardins have all said it would be minimal. A commercial policy may be cheaper, depending on the activity but can range from as low as $600 to $10,000 per year, on average, they fall in the $1,000-$1,500 range.

What a delivery driver needs to know about income and taxes 

A delivery driver standard to make between $17-$22 per hour while out delivering. In Canada, you can make up to $30,000 without the need to register an HST number. Crossing that threshold, and you’ll need to pay taxes on it. Any business is responsible for charging and collecting HST, which after write-offs, they remit the rest to the government. UberEats & Uber don’t charge HST to the client, but you still need to pay the HST if you make over $30,000.

Track every kilometre you use for food delivery, you can only write off the portion you use when driving for the app. Add up the kilometres used for delivery driving vs. personal use to figure out the percentage of gas, car insurance, and maintenance to write off as well.

Belair and Intact have usage-based insurance apps. DoorDash has a kilometre tracker, too.

The Canada Revenue Agency (CRA) is notoriously nitpicky on car-related expenses, so keep all your receipts.

The bottom line

Times are tight, but before you jump headfirst into using your car for profit, call your insurance provider. You don’t want to be out of pocket with no insurance coverage because you wanted to support yourself or your family as a delivery driver. Weigh all your options

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